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Cheniere Partners (CQP) Jumps 4.2% Since Q2 Earnings Beat

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Cheniere Energy Partners, L.P.’s CQP units have increased 4.2% since it reported better-than-expected quarterly earnings on Aug 5. The partnership increased quarterly cash distribution from 66 cents per unit to 66.50 cents. The distribution hike amid the current market volatility signals its operational strength to investors.

It reported second-quarter 2021 earnings per unit of 73 cents, beating the Zacks Consensus Estimate of 61 cents. Yet, the earnings figure declined from 78 cents per unit in the year-ago period.

Revenues of $1,889 million were higher than the year-ago level of $1,470 million but missed the Zacks Consensus Estimate of $2,079 million.

The better-than-expected quarterly earnings were supported by increased LNG volumes delivered and reduced interest expenses. The positives were partially offset by increased operating and maintenance expenses as well as reduced total margins.

Cheniere Energy Partners, LP Price, Consensus and EPS Surprise

Cheniere Energy Partners, LP Price, Consensus and EPS Surprise
Cheniere Energy Partners, LP Price, Consensus and EPS Surprise

Cheniere Energy Partners, LP price-consensus-eps-surprise-chart | Cheniere Energy Partners, LP Quote

Operations

The partnership sent 87 cargoes in the second quarter, up from 58 in the year-ago period. Total LNG volumes loaded in the quarter was recorded at 313 trillion British thermal units (TBtu), higher than the year-ago level of 207 TBtu.

Adjusted EBITDA for the second quarter was recorded at $690 million, down from the year-ago level of $846 million. Profits decreased for the second quarter due to reduced total margins. The year-ago results incorporated accelerated revenues from cancelled LNG cargoes. The negatives were partially offset by reduced interest expenses.

Costs and Expenses

Cost of sales for the quarter was $888 million, up from the year-ago period’s $398 million. Operating and maintenance expenses marginally increased to $168 million from $165 million in second-quarter 2020.

Total costs and expenses for the quarter were recorded at $1,285 million, significantly up from $786 million in the June quarter of 2020.

Cash Flow

The partnership generated operating net cash flow of $1,075 million for first-half 2021, higher than the year-ago level of $874 million.

Balance Sheet

As of Jun 30, 2021, the partnership had only $1,239 million in cash and cash equivalents, up from $1,219 million at first quarter-end. Cheniere Partners had a net long-term debt of $16,935 million, higher than $16,732 million at first quarter-end. Also, its net current debt stands at $654 million. It had a massive debt to capitalization of 96.7%.

Guidance

The partnership reiterated its full-year 2021 guidance for distribution per unit in the range of $2.60-$2.70, indicating an increase from the 2020 figure of $2.59. It expects current distributable cash flow per unit in the range of $3.75-$3.95.

The SPL Project Train 6 was 89.6% complete at second quarter-end. Full work on the train is expected to be completed by first-half 2022, ahead of the previous schedule of completion in the second half.

Zacks Rank & Other Stocks to Consider

The partnership currently has a Zacks Rank #1 (Strong Buy). Other top-ranked stocks from the energy space include Range Resources Corporation RRC, Hess Corporation HES and Equinor ASA EQNR, each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Range Resources’ earnings for 2021 is pegged at $1.53 per share, indicating a massive improvement from the year-ago loss of 9 cents.

Hess’ profits for 2021 are expected to jump 177.1% year over year.

Equinor’s bottom line for 2021 has witnessed three upward estimate revisions and no downward movement in the past 60 days.


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